POMONA, Calif., Sept. 19, 2005 (PRIMEZONE) -- Keystone Automotive Industries, Inc. (Nasdaq:KEYS) today said it is still in the process of assessing the full-impact of Hurricane Katrina on its six locations in the region and addressing the needs of its employees at the affected locations. Five of the six locations are operational. It appears the New Orleans facility will take several months to rebuild.
Based on a preliminary assessment of damages to its operations in the Gulf region, the company expects the financial impact in the second fiscal quarter ending September 2005 will reduce sales by approximately $1.0 million and result in write-offs totaling $450,000 relating to account receivables and insurance deductibles for property damage. These estimates are subject to revisions. The company is unable to determine the impact, if any, on future quarters at this time.
Separately, Keystone said its inventory recovery facility located in Greenville, Michigan, which recycles plastic bumpers, was recently destroyed in a fire and operations have been temporarily relocated to its operation in Saranac, Michigan. The company said that, fortunately, there were no injuries to employees. While the company does not anticipate any impact on sales as a result of the fire, property damage is estimated to be approximately $250,000 net of insurance.
"The financial impact on operations from Hurricane Katrina should have a relatively modest effect on Keystone's overall operations. However, a number of Keystone team members, their families and many customers have been significantly affected by the destruction caused by the hurricane in the Gulf Coast region and our organization has worked diligently to address the human situation," said Richard Keister, president and chief executive officer.
He noted that payroll continuity and meeting other needs of Keystone's team members, some of whom have lost their homes and their possessions, have been a top priority for the company. Keister indicated that the company has reassigned a couple employees to positions elsewhere, but the majority will continue to support Keystone's customer service efforts in the region.
"We are also extremely concerned about the impact of Katrina on Keystone's automotive body shop customers in the region. Helping customers get their businesses running and their employees back to productive work is another top priority of Keystone, as well as the Collision Industry Foundation - which we support," Keister said.
About Keystone
Keystone Automotive Industries, Inc. distributes its products primarily to collision repair shops through its 129 distribution facilities, of which 22 serve as regional hubs, located in 38 states and Canada. Its product lines consist of automotive body parts, bumpers, and remanufactured alloy wheels, as well as paint and other materials used in repairing a damaged vehicle. These products comprise more than 19,000 stock keeping units that are sold to more than 25,000 repair shops throughout the United States and Canada.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release that are not historical facts are forward-looking statements based on the company's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those anticipated by the company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the company) and are subject to change based upon various factors, including but not limited to the impact on the company as a result of Katrina on the company's operations in the Gulf Coast region, the actions of the Illinois Supreme Court in overturning a lower court ruling against State Farm Insurance Company and any subsequent actions which may be taken by insurance companies as a result thereof. Reference is also made to the Cautionary Statements set forth in the company's Form 10-K Annual Report filed with the Securities and Exchange Commission on June 15, 2005 for additional risks and uncertainties facing the company. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.